Articles

Leadership Ethics-Why it matters: by Michael Koscec - Entec Corporation - Thursday, June 04 2009

“Leadership is a combination of strategy and character. If you must be without one, be without strategy.” – H. Norman Schwarzkopf
General Schwarzkopf’s description provides us with a key insight into leadership: having character. However, character does not exist in a vacuum. Character is rooted in ethical values and these values do not shift in reaction to shifting circumstances. Michael Josephson, a renowned ethicist, states that “character” is based on six core ethical values: trustworthiness, respect, responsibility, fairness, caring and citizenship. If you approach all of your decisions through the lens of these six core ethical values, you will always make the right decision. Josephson says there is no such thing as personal or business ethics - there is only ethics.
Leadership ethics is a huge topic that can be looked at from many different perspectives and the following are just three examples:
•    Leadership as it relates to business ethics, (one immediately thinks of Kenneth Lay at Enron, Bernie Ebbers at WorldCom and recently Conrad Black at Hollinger)
•    Politics (former president Richard Nixon and Watergate, and most recently, former New York Governor, Elliott Spitzer)
•    Medicine (Dr. Charles Smith accused of conducting inaccurate forensic autopsies that led to numerous wrongful convictions)
•    Sports (Patrick Roy and his son goalie Jonathan Roy of the Quebec Remparts)

In this article we will confine our examination of leadership ethics as it applies to leaders within organizations and the impact of their behaviors on employee engagement.

Individuals who have value confusion and who are not solidly grounded in clear values, tend to live by “situational” values or “situational” ethics. Their ethics change with the change in circumstances. They often make decisions or take actions and than later find themselves in a situation where they have to rationalize or justify why they made a particular decision. They are inventing reasons that might sound good to explain their behavior. This is essentially dishonest. A person of character, who makes decisions based on a solid foundation of ethics, has no need for rationalization. They made the right decision.
Let’s explore Josephson’s six ethical values in more depth. Trust is the first and the most important. William Ouchi in his book Theory Z, wrote “Productivity and trust go hand in hand. The level of trust that exists in an organization is the single most important element in determining high performance.” Trust creates an environment where employees can reach their maximum capability. Trust includes honesty, integrity and promising keeping. When managers exhibit these leadership behaviours employees develop a greater sense of security and show a strong commitment to their jobs and to their organizations.
The remaining five ethical values flow from trust. For example, if you manage a team of employees who you treat with respect, they will reciprocate the respect. This environment of mutual respect builds a trusting organization. However, if you bully your employees, you will lose respect in their eyes and lose their trust. The same applies to the other ethical values. For example, research has shown that fair treatment of employees raises their capacity to deal with stress on the job. Being treated fairly by their immediate supervisors, employees increase their level of trust resulting in positive outcomes for the company in terms of higher productivity and positive outcomes for employees in terms of higher self-esteem and job satisfaction.
I personally like Dale Carnegie’s definition of leadership: “A leader is a person who takes you where you would not go on your own.” Implicit in this definition is an ethical leader who you trust. Without trust you would not follow them where you would not go on your own.
Entec Corporation has been conducting employee engagements surveys for the past twelve years. Several years ago when our database had grown close to 50,000 employees, we ran a series of statistical analyses of our database and linked our analyses to a number of our clients’ key performance indicators. The research was designed to determine which workplace practices and leadership behaviors had the greatest impact on employee engagement and on employee emotional wellness. We were able to do the later because many of our clients used our Level 2 and Level 3 Employee Engagement Surveys that measure organizational practices as well as various aspect of emotional wellness. The results of this research were published in the book, Energizing Organizations, in 2007.
The leadership behaviors that we measure fall into two categories: behaviors that relate to performance management and communication, and behaviors that relate to personal characteristics, ethics and fairness. The research showed that from the perspective of employee engagement, leadership behaviors that related to personal characteristics, ethics and fairness were more important to enhancing employee engagement than performance management. Some of the most important behaviors impacting employee engagement were:
•    My manager treats me with respect
•    My manager is someone I can trust and talk with openly
•    My manager keeps promises and stands by commitments made
•    Resolves conflicts fairly and appropriately
•    Treats everyone equally-does not play favorites

These “character” behaviors were more important than performance management behaviors that are commonly referenced in business literature as being key to employee engagement. Some of top performance management behaviours that are frequently cited include:

•    Recognizes or praises me whenever I do a good job
•    Provides me with ongoing feedback
•    Supports my personal development
•    Ensures that I have the right skills and knowledge

The research results are saying that employees will give their manager some “slack” when it comes to performance management, as long as they trust their manager. They will overlook a manager’s failings and weaknesses, as long as the manager keeps promises, is fair, treats everyone equally and treats everyone with respect. This is not to say that performance management is not important. It says that character trumps performance management.
The research supports General Schwarzkopf’s assertion, that character is more important than strategy, or in this case performance management.

Michael Koscec
March 28, 2008

Design and Development by Intelex